Will Value Stocks Continue to Outperform?
Prospects are tenuous for sustained outperformance of value stocks on the whole. We recommend owning value stocks, but would not broadly overweight just yet.
Authored by: Celia Dallas
Is It Time to Rebalance?
Begin to rebalance into undervalued assets provided you have adequate liquidity to take advantage of additional opportunities that may develop.
VantagePoint: First Quarter 2016
In this edition of VantagePoint, we briefly discuss economic growth prospects, reaffirming the need to be cautious about cyclically oriented assets in an environment of low growth and severe weakness in some corners that could potentially spread. In other words, we remain patient in evaluating opportunities and set high standards for taking cyclical risk. We review our outlook for cheap assets that keep getting cheaper (commodity-related assets and emerging markets equities), evaluate the case for high-yield bonds as yields and spreads have widened, and revisit our global developed markets equity recommendations.
Now That Emerging Markets Equities Are Very Undervalued, Should Investors Increase Overweights?
No. We continue to advise small overweights to Asia ex Japan or emerging Asia relative to US equities, but would not suggest investors add more substantial overweights unless they have an exceptionally long time horizon and the ability to tolerate substantial volatility. The risks to emerging markets are well known. Commodity weakness, a slowdown in…
Revisiting Fixed Income Investing When Interest Rates Rise
Investors should be wary of modifying their bond exposures solely based on what they think interest rates might do, and focus instead on bonds’ role in the portfolio and on mitigating risk/return asymmetry at current yields.
VantagePoint: Fourth Quarter 2015
Advice in Brief The consensus view that a global recession is not imminent seems reasonable, but the possibility cannot be ruled out. This keeps us looking for bargains, but leaving the bar high, as most assets are not cheap and what is cheap is generally cyclically oriented. Asian emerging markets or Asia ex Japan equities…
Has Recent Market Action Created Opportunities for Investors?
The answer depends on what kind of investor you are.
What Should Investors Make of Recent Headlines from China and Greece?
The situations in China and Greece, not to mention Puerto Rico’s debt woes, serve as a poignant reminder not to be complacent. Investors should take care that portfolios are well constructed, diversified, and consistent with their ability to absorb downside risks while meeting long-term return objectives. With risks rising in some areas, and few bargains…
VantagePoint: Third Quarter 2015
This edition of VantagePoint reviews the potential for contagion from Greece, concluding that the ECB appears to have adequate ammunition to manage through current conditions, but longer-term political risks remain. We consider recent activity in Chinese equity markets and conclude that offshore Chinese H-shares offer more appeal than onshore A-shares, where upside potential is limited as highly leveraged investors seek to reduce exposure by selling into rallies. We examine the prospects for a sustained reversal of major trends that have persisted since last year, concluding that reversals appear unlikely for now.
VantagePoint: Second Quarter 2015
Advice in Brief We generally remain neutral on risky assets, but are becoming more cautious and selective as the market cycle advances and the US Federal Reserve looks to begin raising rates. We maintain our advice that investors shift more capital into safer assets as equity markets become more expensive. Volatility has been rising in…